BUZZ-COMMENT-FX traders exposed after erasing Trump trade

March 3 (Reuters) - This year traders have halved bets on the dollar rising with the net long now smaller than it was before the U.S. election, yet the dollar is little changed this year and much higher than it was in November.

Donald Trump's second term in office has barely begun with a crucial deadline day for tariffs on Tuesday, yet traders who feared the negative consequences of the trade war his proposed tariffs could lead to have chosen to gamble.

They have slashed a long position from $34 billion in January to $16 billion at the end of February with four short positions now held, one of which versus the Japanese yen, is the largest ever recorded.

Tariffs imposed against China may double on Tuesday while those threatened against Canada and Mexico may become real. There are fears that more widespread measures will drag the euro zone into the fight, but speculators have reduced bets against the single currency from $10 billon to $3.3 billion.

EUR/USD which started this year around 1.0350 has barely moved while traders have covered shorts, which leave it trading below the base of the trading range for the prior two years. Traders are less prepared for this significant bearish development which saw the pair reach earlier this year 1.0125, and subsequent recoveries fail at the base of the old range.

The dollar index which was around 100 before Trump came to power is currently 107.33.

For more click on FXBUZ